Author Question: The reason externalities distort the allocation of resources is that a. too few goods are usually ... (Read 63 times)

tsand2 · **on:** Jul 1, 2018

The reason externalities distort the allocation of resources is that
a. too few goods are usually produced.
b. firms often go out of business because of the externality.
c. a firm's private costs do not reflect the social cost of production.
d. regulating externalities uses scarce resources.

Question 2

Each of the following factors might interfere with the efficiency of perfect competition except:
a. increasing returns to scale.
b. imperfect price information.
c. externalities.
d. diminishing returns to scale.